Wage ‘docking’ policy invalidated

A company’s written policy, under which a worker found by the company to be at fault in an accident involving company trucks may agree to a deduction from earned wages in lieu of discipline, violates the Massachusetts Wage Act, the Supreme Judicial Court has ruled.

“The statutory language and the interplay of §§148 and 150 of the Wage Act reflect that employee deduction agreements of the type at issue in this case constitute special contracts that §148 prohibits unless the deductions are valid setoffs for clear and established debts within the meaning of §150,” Judge Margot Botsford wrote for the SJC.

The company, ABC Disposal Service Inc., argued that the debts were “clear and established” because ABC performed thorough investigations and made findings of fault before entering into setoff agreements with employees.

But the SJC disagreed.

“An arrangement whereby ABC serves as the sole arbiter, making a unilateral assessment of liability as well as amount of damages with no role for an independent decision maker, much less a court, and, apparently, not even an opportunity for an employee to challenge the result within the company, does not amount to ‘a clear and established debt owed to the employer by the employee,’” Botsford stated.